Muslim Only Banks For Ann Arbor!
Michelle Malkin has a link via The Miami Hearald, that explains how the Ann Arbor-based University Bank has created University Islamic Financial Corp. to offer Muslims home financing, deposit accounts and Islamic mutual fund shares.
This has been going on for the past 2 years.
“The formation of the subsidiary allows us to have a financial institution which is 100 percent in compliance with the Muslim Shariah, the legal code of the Islamic religion,” bank President and Chairman Stephen Lange Ranzini told The Ann Arbor News for a Saturday story.
Among the laws of Shariah is a ban against paying or receiving interest.
The bank’s Islamic deposit accounts allow Muslims to open accounts where any profits are shared rather than paid as interest.
University Bank also offers a mortgage alternative loan transaction program - or MALT - which replaces a traditional home loan with a redeemable lease.
The bank holds the home in trust, and a home buyer makes monthly payments to that trust. Each rent payment includes a set amount of savings, which builds the buyer’s equity in the home. When the savings account equals the home’s original purchase price, the buyer owns it.
The mortgages are offered across the state, with 57 families in the Detroit area having such loans, and Ranzini said plans are to offer such mortgages nationwide.
Other banks also are targeting Muslims, said Tracey Mills, a spokeswoman for the American Bankers Association trade group.
“There have been other banks that have formed relationships with the Islamic community, developing lending products that aren’t in violation with Islamic law,” she said.
Well I for one am glad that they conform to with Islamic law..(choking)
Please share your thoughts on this! I would love to know if it is legal for them to turn away non-Muslims. I would also like to know if this bank is recognized by the feds.
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January 6, 2006 - 01:58 AM on January 6th, 2006
On the surface of it, this interest only loan sounded crazy. My first question about this loan was, what’s in it for the bank? It would seem that if these loans are not indexed to inflation then the bank is losing money. So, I looked into it here
It seems like it’s a sophism. The bank owns the property and leases it out to the lendees. The lendees pay rents (which I think must be in someway indexed to an interest payment). So, essentialy, it’s a rent to own scheme. The interesting question is what are the terms of lease. For example, can the bank sell the lease to another lender (if not, then it seems rather risky for the bank). What rights do the lendees have–for example, if the bank goes bankrupt, what happens? FDIC is only up to 130K on accounts and 260K on IRAs and 401Ks–where does this fit in?
I tried to check out the bank site online, but wasn’t successful in finding out more details, like what would the rent be and how does it compare to the rates that the rest of us pay? Is it a fixed rate? The problem with this whole ban on interest is that apparently under shariah, is that it would seem to offer a strong limit on markets. Their short term loans can have a profit, but it’s fixed, so is only good for short term loans. But for long term loans, their only way out is based on this rent to own idea backed on real estate assets.
January 6, 2006 - 10:00 AM on January 6th, 2006
I think having a Muslim bank makes it easier to track attempted money movements to Known Terrorists.
January 6, 2006 - 10:18 AM on January 6th, 2006
It also provides a centralized bombing target.
January 6, 2006 - 10:54 AM on January 6th, 2006
I poked around the bank’s site. University Bank is insured by FDIC. The “Islamic product” in question is sold to Fannie Mae. They’re somewhat independent as I understand it.
January 6, 2006 - 01:21 PM on January 6th, 2006
Thank you eLarson.. I will NEVER do business with Fannie Mae again.
January 6, 2006 - 02:21 PM on January 6th, 2006
Re post #4: Since it is a religious-based bank, how can the Feds back it? WHERE IS THE ACLU? Protector of the separation of church and state!
I predict that because the concept of this bank damages traditional American society, the Anti-American Communist Liberals United will not interfere.
January 6, 2006 - 07:07 PM on January 6th, 2006
6- exactly Robert! And I bet they don’t give out piggy banks for opening an account:wink:
January 6, 2006 - 08:28 PM on January 6th, 2006
Did you hear about the big Suicide Bombers’ New Year party? I heard it was a real blast!
January 8, 2006 - 03:11 AM on January 8th, 2006
Why am I not surprised that Fannie Mae is backing this rent to own property plan? They’ve already come out saying that they are encouraging lenders to develop mortgage programs for illegal aliens because it is an underserved segment of the market. It doesn’t matter that 29 years from now the illegal can be rounded up and kicked across the border and the bank end up owning the property. (I wouldn’t be surprised that that was actually part of the appeal to the bank to support these programs.) Wanna have some fun? Try getting a mortgage if you’re on a commission basis job or self employed for under 2 years. But an illegal can get a mortgage despite the risk of not being able to make the payments because they’ve been deported. BTW I’ve heard rumors that the Catholic church is cosigning loans for illegals who are Catholic to get homes here. Anyone care to guess who is the largest owner of real estate on the planet? Here’s a hint, those Cathedrals and monasteries weren’t exactly expensive when purchased hundreds of years ago. and since they pay no taxes, think how much tax money the cities could make if the used eminent domain to take a few of them and turn them over to developers for the tax dollars. Now that should scare some people into pushing for legislation to take the teeth out of the recent Kelo decision.
January 9, 2006 - 10:06 AM on January 9th, 2006
Muhameds first nationa bank whats next?:razz:
January 12, 2006 - 10:58 AM on January 12th, 2006
The outrage is a little silly here. All the banks are doing is offering a product that allows Muslims to borrow money without violating their religious restrictions against paying or charging interest. The product is equally available to non-Muslims (though I don’t think it will be attractive to non-Muslims, since it’s actually a bit more expensive than traditional borrowing arrangements). Kinda like kosher chicken — anyone can buy one, and some non-Jews do as a matter of culinary preference, but you’re gonna pay more for it. In any event, it sounds to me like this is nothing more than the free market at work. The banks identified a need, and have created a product to fill it. It’s just the sort of thing that makes America great.
January 12, 2006 - 11:07 AM on January 12th, 2006
Like I said, Muslim bank…wonderful, provides a very specific and localized bombing target.
January 12, 2006 - 11:13 AM on January 12th, 2006
nola said “allows Muslims to borrow money without violating their religious restrictions against paying or charging interest.“- there is a seperation of Church and State. Why is it being sidestepped in this case?
January 13, 2006 - 10:30 AM on January 13th, 2006
So the idea is to help Muslims who observe their religions prohibition on paying interest to pay for their loan in a different way. They end up paying the same (or more) and anyone else who wants to can do the same.
Yeah, we should be really outraged about that…[/sarcasm]
Why bother getting the facts first; there’s Brown people to bash! Typical racist right wing knee-jerk reaction. Why am I not surprised this came from Michelle “lock `em all up” Malkin?
January 13, 2006 - 11:25 AM on January 13th, 2006
A Hermit- that is not true that others can do the same. Banks are not offering interest free loans to non-muslims and the issue here is that the bank, a federal institution, is catering to religion. That is a big no-no. Nothing racist about it. Learn what the word means before you toss it around!
January 13, 2006 - 02:00 PM on January 13th, 2006
peejz…don’t argue with A Hermit..he’s right…don’t you know that being a republican AUTOMATICALLY makes you racist?
I voted for President bush, therefore, I hate niggers, and spics, and fags, and chinks, and towelheads….
don’t you know that?
January 13, 2006 - 04:02 PM on January 13th, 2006
Maybe I didn’t use the words you chose Mike, but the idea had crossed my mind this morning when listening to Alito’s hearing!